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Finance


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Alpha


A measure of excess return which is typically defined as the net risk-adjusted premium derived from an investment position or a portfolio of assets. Alpha is the amount of return left after subtracting the beta return (normal return) and the risk-adjusted return. The risk-adjusted return is specific and proportionate to the position or portfolio’s own risk profile and characteristics. If the total return is below market return, alpha will be negative, and vice versa.


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